Payment Management Problems?
Apr 22, 2019 09:34PM
About 10 years ago Chris Mills, now the CEO of Greenhouse Payment Solutions, was approached by a guy from a finance company to help out a business that needed credit-card processing. “I walked into the business, and it looked like a cool coffee shop,” he says. “I looked around and asked what kind of business this was. They told me it was medical marijuana and gave me the full tour.”
After credit cards there were shut down, he stuck around, which ultimately led to Greenhouse Payment Solutions. “I said, ‘W e better try to figure this out.’” Today, Mills says, there are certain legal “workarounds” some bad and some good that a cannabusiness can use for payment processing. “But workarounds are complicated for the customer to understand,” he says.
He works now with a cashless ATM system, which has been the most reliable. “It doesn’t get shut down,” he says. “Customers can use their cards. Some people like it. Some don’t. But it works.” The bigger issue is that, before any payment solution can work, there has to be a bank account involved. “That is really the first headache,” he says.
There are eight small banks and credit unions in Colorado that have set up bank accounts for cannabis businesses, but they charge from $1,500 to $3,000 just to have an account. “And they are backlogged,” Mills says. “There are people that filled out the papers to open an account, but they still don’t have an account because the banks are backlogged 50 people deep, and they don’t open that many new accounts per month.”
In some of the newer legal cannabis states, banks aren’t concerned about the movement of cannabis business funds because they are getting electronic deposits, he says. But other banks have to know everything, especially on the East Coast. “In Massachusetts, those banks have to have five conference calls, and want you to explain how everything works,” he says. “They have to vet your process. And then they charge around $5,000 per account.”
Greenhouse Payment Solutions has offices in Denver, Columbus, Boston, Las Vegas and Phoenix, and is considering Pennsylvania. The company is currently working with 400 clients in 27 states, including a one-million-dollar-a-week dispensary in Massachusetts, some high-volume stores in Las Vegas, as well as smaller shops. He says that Greenhouse Payment Solutions is working now to find banks in Oklahoma, because the cannabusiness there is expanding quickly following medical legalization.
There are eight people in the company’s core group, and 24 working nationwide. “We don’t just do payment processing,” Mills says. “We help you have a voice at the bank. We are advocates for clients, really.”
Change is coming slowly but surely in the cannabis industry, and that can help companies such as Greenhouse Payment Solutions. But it’s still contentious. “We are at the point where we have Big Pharma coming in, the liquor companies coming in, big, billionaire investors buying stuff up,” Mills says. “All these corporate traditional guys still don’t want someone smoking cannabis on their ad or have a marijuana leaf on product packaging or business cards. So there’s a lot of head-butting going on.”
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